Brevan Howard Starts 2017 With a Loss in Its Main Hedge Fund

Brevan Howard Asset Management’s main hedge fund started this year with a loss, reversing some of its gains of 2016, according to an investor letter seen by Bloomberg News.

The Brevan Howard Master Fund, which managed $11.9 billion at the end of 2016, lost 1.5 percent in January, according to the letter. The fund returned 3 percent last year, its first annual gain in three years. A spokesman for the investment firm run by billionaire Alan Howard declined to comment.

The returns last year pushed the fund above the high-water mark, the point where hedge funds become eligible to charge a performance fee, but failed to stop investor withdrawals. The fund suffered about $7 billion in outflows in 2016, a person with knowledge of the matter said last month.

Investors exited hedge funds betting on macro economic trends following years of high fees and poor performance exacerbated by low interest rates and central bank intervention. Macro hedge funds had net withdrawals of $13.7 billion in 2016, according to data from eVestment.

The HFRX Macro/CTA Index declined 0.95 percent in January.

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